Since UML provides a full-blown virtual machine, there has been a
lot of interest in it from the hosting industry. Providing customers
with individual virtual machines promises to combine the advantages
of a dedicated machine for each customer with the administrative convenience
of a small number of servers.

UML would give customers their own virtual machine that they could
set up any way they want, with services that normally aren't provided
by a hosting service because of potential resource consumption or
security concerns. These would be hosted on a small number of larger
servers, greatly simplifying the administrative work on the part of
the hosting company.

It's also possible that UML virtual machines can produce greater performance
at lower cost to the customer. For example, if a number of virtual
machines are serving relatively low-traffic web sites, then only one
may be active at any given time. This virtual machine will have the
entire large server to itself. In constrast, with a normal colocation
arrangement, this site would served by a single small physical machine.
Depending on the virtualization overhead imposed by UML, it is possible
that the virtual machine running on the large server could outperform
the smaller physical machine.

A related application is sandboxing or jailing. Since UML is going
to be a completely secure jail for whatever is running inside it,
it has obvious uses for confining untrusted users or processes. A
service that provides accounts for the public could isolate each user
inside a virtual machine, preventing them from damaging the host or
harrassing each other in any way. They could be given root access
inside the virtual machine, which would let them destroy anything
inside it, but they couldn't touch anything else.

UML can also be used to confine system services whose security is
suspect. Prominent example include bind and sendmail. A sysadmin who
wants to be sure that someone can't break in through one of these
servers can run it inside a virtual machine. If someone cracks it,
they gain access to the virtual machine, not the host. So in order
to do any actual damage, they'd also need an exploit to break out
of UML.